(Newsletter) - 5 Spending Personalities and How We're Programmed To Buy
- La Juan Gill
- Mar 24
- 5 min read
Hey Reader,
Today is an exciting one! I'm going into :
- 2 topics you may not know are keeping you from growing and storing your wealth.
- 1 bit of financial advice from World Renowned Financial Behaviourist Morgan Housel.
- And a super actionable financial gift you can take advantage of today, so be sure to get to the bottom of the email - or jump to there if you're busy, but you'll miss the juiciest parts!
Knowing your spending personality can save you thousands a year :
According to the office of financial readiness, there are 5 spending types ;
Carefree spender - You use phrases like "You only live once or you can’t take it with you", when justifying a purchase.
You're adventurous, spontaneous and fun, but you're also impulsive and underprepared.
Imagine you're in a sail boat... you go mostly where the wind blows. "Who needs a map?!" This is the adventurous, exciting life of a carefree spender, but... making a basic map (spending plan) will give you a greater ability to enjoy the spontaneous adventures, because you'll know you're always moving toward the treasure.
Emotional Spender - You use phrases like "I deserve this or today was a hard one", to justify impulse purchases at least once a week.
You're a sensitive and kind hearted soul, especially when high emotions are involved. You spend generously, when on vacation or gifting to friends and family. You make a plan, you just never stick to it.
Imagine you're in a sail boat... you see a dolphin so you follow it, then you spot a turtle and you dart over there. "It's about the journey". This is the sporadic, undisciplined life of an emotional spender.
Planning for life's lows and highs in your spending plan will give you effortless discipline. If you know you spend more on vacation, leave your credit card home and carry a Visa Debit instead.
If you're always burnt out so you buy food, meal prep. This way you'll build confidence in following your plan, and confidence breeds success.
Reluctant Spender - You use phrases like "I don't need this or I can do this myself", when justifying not making a purchase.
You're diligent and thoughtful about your finances, but you're also mistaking hoarding money for growing wealth and people around you probably resent you a little.
Imagine you're in a sail boat... you don't use the sail because its 25cents per mile so you force your family to paddle. "Elbow grease!" This is the self inflicted hardship faced by the reluctant spender. Making a spending plan will give you a greater ability to enjoy the lifelong journey and express generosity. You can have nice things and get to the treasure.
Purposeful Spender - You use phrases like "Pay yourself first or more expensive, but better value", when justifying purchases.
You're measured and thoughtful about your money, but you're also balanced and like to enjoy it.
Imagine you're in a sail boat... you have a map and stick to the general direction quite well. "Once we keep going this direction, we can play on the way there!" This is the fun, disciplined and peaceful life of a purposeful spender. You already have a spending plan, you can continue to grow by learning more.
Golden Retirement Spender - You use phrases like "Money is best for buying time or its an investment ", when justifying a purchase.
You're highly motivated to gain your financial freedom and don't deter focus from this for too long.
Imagine you're in a sail boat... you're looking to accumulate motors quickly. "Crank the motors!" This is the diligent life of a golden retirement spender. You already have a map, know the wind speed and the current direction. You understand smart investing can bring wealth much faster so you're constantly learning.
Which of these are you?
Hit reply and let me know, I read every email!
Consumer psychology influences almost every decision you make ... and you didn't know it :
While researching my latest youtube video, I learned the greatest money saving hack is making lists. Retailers invest hundreds of millions collectively and have the smartest people in the world studying how to make us buy.
Here's a some quick examples :
More than 2/3rds of purchases at supermarkets are unplanned,
and I'd bet that sales at other retailers aren't too far behind.
2. The impulse bait items by the cashier generated $6.5 Billion in 2023
3. The 80 / 20 Principle applies with impulse purchases as well...
If you don't like graphs, here's what it says in simple terms, in the last 20% of time you spend in a store, you're most likely to make an impulse purchase. Think about being at the cashier, why all the best things are at the back of the store, or why Costco don't label their aisles.
Morgan Housel's advice : A pre-requisite to wealth, is conquering FOMO (The fear of missing out).
If you had any money and lived in Japan between the years of 1986 & 1991, you would have invested heavily into Tokyo Real Estate. You would have been stupid not to.
People were experiencing 300+% return on their investments in just 5 years. It's not hard to imagine the immense social pressure from friends and family to join in on the quick money.
The fall out happened just 1 year later...in late 1991 prices began declining and in early 1992 the economic bubble officially burst. Asset prices devalued and continued on a slow decline for the next decade.
That's now known in Japan as the lost decade. The entire country's growth stagnated, but this is about the individuals who lost everything as a result of that FOMO.
If you went in on the gold rush, without understanding the risks involved, you would've most likely been over leveraged and lost almost everything. Particularly if you knew nothing about 'bubbles'.
The lesson here is to not let FOMO guide your financial decisions. It comes strongest when we see quick jumps in wealth by people who are perhaps facing the emotional fall out of that windfall, but look happy externally to us. (Think crypto-currency in the 2010s & the generation of people that got rich quickly, went off the rails with bad habits and lost almost all purpose and drive in their lives as a result of never developing the traits required to accumulate serious wealth).
Here's the gift : The Minimalist Money Mindset free mini-course (6-lessons to learn how to live a life of abundance at any income level).
If you want to improve your quality of life and not sacrifice your savings to do so, then this free mini-course was made with you in mind. Here you'll learn the art of spending to create abundance regardless of how much money you make.
Join here : https://www.ftbix.com/challenges
All the best,
LaJuan